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EXHIBIT 10.92(G)
REGISTRATION RIGHTS AGREEMENT
by and between
OUTSOURCE INTERNATIONAL, INC.
and
The INITIAL HOLDER Specified on
the Signature Pages Hereof
Dated as of August 15, 2000
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TABLE OF CONTENTS
Page
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1. DEFINITIONS................................................................................... 1
2. REGISTRATION UNDER THE SECURITIES ACT......................................................... 5
2.1 Demand Registration.................................................................... 5
2.2 Incidental Registration................................................................ 8
2.3 Shelf Registration..................................................................... 10
2.4 Underwritten Offerings................................................................. 11
2.5 Expenses............................................................................... 11
2.6 Postponement........................................................................... 11
3. HOLDBACK ARRANGEMENTS......................................................................... 12
3.1 Restrictions on Sale by Holders of Registrable Securities.............................. 12
3.2 Restrictions on Sale by the Company and Others......................................... 13
4. REGISTRATION PROCEDURES....................................................................... 13
4.1 Obligations of the Company............................................................. 13
4.2 Seller Information..................................................................... 17
4.3 Notice to Discontinue.................................................................. 18
5. INDEMNIFICATION; CONTRIBUTION................................................................. 18
5.1 Indemnification by the Company......................................................... 18
5.2 Indemnification by Holders............................................................. 19
5.3 Conduct of Indemnification Proceedings................................................. 19
5.4 Contribution........................................................................... 20
5.5 Indemnification Payments............................................................... 20
6. GENERAL....................................................................................... 20
6.1 Adjustments Affecting Registrable Securities........................................... 20
6.2 Registration Rights to Others.......................................................... 21
6.3 Availability of Information; Rule 144; Other Exemptions................................ 21
6.4 Amendments and Waivers................................................................. 22
6.5 Notices................................................................................ 22
6.6 Successors and Assigns................................................................. 23
6.7 Counterparts........................................................................... 24
6.8 Descriptive Headings, Etc.............................................................. 24
6.9 Severability........................................................................... 24
6.10 Choice of Law and Venue; Jury Trial Waiver............................................ 24
6.11 Remedies; Specific Performance........................................................ 25
6.12 Entire Agreement...................................................................... 25
6.13 Further Assurances.................................................................... 25
6.14 Construction.......................................................................... 26
6.15 No Inconsistent Agreement............................................................. 26
6.16 Costs and Attorneys' Fees............................................................. 26
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REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of August 15,
2000, by and among Outsource International, Inc. a Delaware corporation (the
"Company"), and the Initial Holder specified on the signature pages to this
Agreement.
W I T N E S S E T H :
WHEREAS, in connection with the Financing Agreement dated as of the
date hereof, as such agreement is amended or otherwise modified from time to
time, by and among the Company, Outsource International of America, Inc.,
Outsource Franchising, Inc., Guardian Employer East, LLC, Guardian Employer
West, LLC, the guarantors party thereto, Ableco Finance LLC and the CIT
Group/Business Credit, Inc. (the "Financing Agreement"), the Company has
agreed, upon the terms and subject to the conditions of the Financing
Agreement, to issue a warrant (the "Warrant") to the Initial Holder dated as of
the date hereof exercisable for up to 200,000 shares of the Company's Common
Stock, par value $0.001 (the "Common Shares") pursuant to the terms of the
Financing Agreement (the shares of Common Stock issued or issuable upon
exercise of the Warrant are hereinafter referred to as the "Warrant Shares");
and
WHEREAS, to induce Ableco Finance LLC, an affiliate of the Initial
Holder, to enter into the Financing Agreement and to make the loans thereunder,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder,
or any similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and in order to induce Ableco Finance LLC to enter
into the Financing Agreement and to make the loans thereunder, the Company and
the Initial Holder hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" shall mean (i) with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Common Shares" shall have the meaning set forth in the preamble.
"Company" shall have the meaning set forth in the preamble.
"Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement of
the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such registration statement,
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including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference (or deemed to be incorporated by reference) therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Financing Agreement" shall have the meaning set forth in the
preamble.
"Holders" shall mean the Initial Holder for so long as it is the
registered owner of any Registrable Securities and such of its respective
heirs, successors and permitted assigns (including any permitted transferees of
Registrable Securities) who acquire or are otherwise the transferee of
Registrable Securities, directly or indirectly, from such Initial Holder (or
any subsequent Holder), for so long as such heirs, successors and permitted
assigns are the registered owner of any Registrable Securities provided, that
any transfer or assignment to any third party shall require that the Initial
Holder (or any subsequent Holder) surrender the Warrant to the Company so that
it may be reissued to such transferee or assignee pursuant to the terms of
Section 13.2 of the Warrant. For purposes of this Agreement, a Person will be
deemed to be a Holder whenever such Person holds an option to purchase, or a
security convertible into or exercisable or exchangeable for, Registrable
Securities, whether or not such purchase, conversion, exercise or exchange has
actually been effected and disregarding any legal restrictions upon the
exercise of such rights. Registrable Securities issuable upon exercise of an
option or upon conversion, exchange or exercise of another security shall be
deemed outstanding for the purposes of this Agreement.
"Holders' Counsel" shall mean one firm of counsel (per registration)
to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of a Demand Registration, by
the Initiating Holders holding a majority of the Registrable Securities for
which registration was requested in the Request, and (ii) in all other cases,
by the Majority Holders of the Registration.
"Incidental Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
statement of the Company, which covers the Registrable Securities requested to
be included therein pursuant to the provisions of Section 2.2 and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference (or
deemed to be incorporated by reference) therein.
"Initial Holder" shall mean the Person specified as such on the
signature pages to this Agreement on the date hereof.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for such registration.
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"Majority Holders" shall mean one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders of Registrable Securities who
would hold a majority of the Registrable Securities to be included in such
registration.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act) and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in
each case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" shall mean (i) any Warrant Shares issued upon
exercise of the Warrant, and (ii) any other securities of the Company (or any
successor or assign of the Company, whether by merger, consolidation, sale of
assets or otherwise) which may be issued with respect to, in exchange for, or
in substitution of, Registrable Securities referenced in clause (i) above by
reason of any dividend or stock split, combination of shares, merger,
consolidation, recapitalization, reclassification, reorganization, sale of
assets or similar transaction. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and either (i) the
registration statement with respect thereto has remained continuously effective
for one year from the time the Warrant Shares are issued pursuant to the
Warrant (provided, that this clause (A)(i) shall not apply to a registration
statement that is a shelf registration) or (ii) such securities shall have been
disposed of in accordance with such registration statement, (B) such securities
are sold pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act, (C) such securities have been otherwise transferred, a new
certificate or other evidence of ownership for them not bearing the legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act, or (D) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all reasonable out of
pocket expenses incident to performance of or compliance with this Agreement by
the Company and its subsidiaries, including, without limitation (i) all SEC,
stock exchange, NASD and other registration, listing and filing fees, (ii) all
fees and expenses incurred in connection with
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compliance with state securities or blue sky laws and compliance with the rules
of any stock exchange (including fees and disbursements of counsel in
connection with such compliance and the preparation of a blue sky memorandum
and legal investment survey), (iii) all printers' fees and costs incurred in
printing, distributing, mailing and delivering any Registration Statement, any
Prospectus and any other document relating to the performance of or compliance
with this Agreement, (iv) the fees and disbursements of counsel for the
Company, (v) the reasonable fees and disbursements of Holders' Counsel, (vi)
the fees and disbursements of all independent public accountants (including the
expenses of any audit and/or "cold comfort" letters) and the fees and expenses
of other Persons, including experts, retained by the Company, (vii) the
expenses incurred in connection with making road show presentations and holding
meetings with potential investors to facilitate the distribution and sale of
Registrable Securities, (viii) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, (ix) premiums and other
costs of policies of insurance against liabilities arising out of the public
offering of the Registrable Securities being registered, and (x) all internal
expenses of the Company (including all salaries and expenses of officers and
employees performing legal or accounting duties); provided, however,
Registration Expenses shall not include discounts and commissions payable to
underwriters, selling brokers, dealer managers or other similar Persons engaged
in the distribution of any of the Registrable Securities; and provided further,
that in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the
Company or other expenses for the preparation of financial statements or other
data normally prepared by the Company in the ordinary course of its business or
which the Company would have incurred in any event; provided, further, that in
the event the Company shall not register any securities with respect to which
it had given written notice of its intention to register to Holders,
notwithstanding anything to the contrary in the foregoing, all of the costs
incurred by the Holders in connection with such registration shall be deemed to
be Registration Expenses.
"Registration Statement" shall mean any registration statement of the
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
"Rule 144" means Rule 144 issued by the SEC under the Securities Act,
or any subsequent rule pertaining to the disposition of securities without
registration.
"Rule 144A" means Rule 144A issued by the SEC under the Securities
Act, or any subsequesnt rule pertaining to private resales of securities to
institutions.
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall have the meaning set forth in the preamble.
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"Shelf Registration" shall have the meaning set forth in Section
2.1(a).
"Underwriters" shall mean the underwriters, if any, of the offering
being registered under the Securities Act.
"Underwritten Offering" shall mean a sale of securities of the Company
to an Underwriter or Underwriters for reoffering to the public.
"Warrant" shall have the meaning set forth in the preamble.
"Warrant Shares" shall have the meaning set forth in the preamble.
"Withdrawn Demand Registration" shall have the meaning set forth in
Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Financing Agreement.
2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 Demand Registration.
(a) Right to Demand Registration. Subject to Section 2.1(c), at
any time or from time to time the Majority Holders shall have the right to
request in writing that the Company register all or part of such Holders'
Registrable Securities (a "Request") (which Request shall specify the amount of
Registrable Securities intended to be disposed of by such Holders and the
intended method of disposition thereof) by filing with the SEC a Demand
Registration Statement. As promptly as practicable, but no later than 10 days
after receipt of a Request, the Company shall give written notice of such
requested registration to all other Holders of Registrable Securities. Subject
to Section 2.1(b), the Company shall include in a Demand Registration (i) the
Registrable Securities intended to be disposed of by the Initiating Holders and
(ii) the Registrable Securities intended to be disposed of by any other Holder
which shall have made a written request (which request shall specify the amount
of Registrable Securities to be registered and the intended method of
disposition thereof) to the Company for inclusion thereof in such registration
within 30 days after the receipt of such written notice from the Company. The
Company shall, as expeditiously as possible, following a Request, use its best
efforts to cause to be filed with the SEC a Demand Registration Statement
providing for the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register by all such
Holders, to the extent necessary to permit the disposition of such Registrable
Securities to be registered in accordance with the intended methods of
disposition thereof specified in such Request or further requests (including,
without limitation, by means of a shelf registration pursuant to Rule 415 under
the Securities Act (a "Shelf Registration") if so requested and if the Company
is then eligible to use such a registration. The Company shall use its best
efforts to have such Demand Registration Statement declared
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effective by the SEC as soon as practicable thereafter and to keep such Demand
Registration Statement continuously effective for the period specified in
Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a
"Withdrawn Request") and a Demand Registration Statement may be withdrawn prior
to the effectiveness thereof by the Majority Holders of the Registration (a
"Withdrawn Demand Registration"), and such withdrawals shall be treated as a
Demand Registration which shall have been effected pursuant to this Section
2.1, unless the Holders of Registrable Securities to be included in such
Registration Statement reimburse the Company for its reasonable out-of-pocket
Registration Expenses relating to the preparation and filing of such Demand
Registration Statement (to the extent actually incurred), in which case such
withdrawal shall not be treated as a Demand Registration effected pursuant to
this Section 2.1 (and shall not be counted toward the number of Demand
Registrations); provided, however, that if a Withdrawn Request or Withdrawn
Registration Statement is made (A) because of a material adverse change in the
business, financial condition or prospects of the Company, or (B) because the
sole or lead managing Underwriter advises that the amount of Registrable
Securities to be sold in such offering be reduced pursuant to Section 2.1(b) by
more than 25% of the Registrable Securities to be included in such Registration
Statement, or (C) because of a postponement of such registration pursuant to
Section 2.6, then such withdrawal shall not be treated as a Demand Registration
effected pursuant to this Section 2.1 (and shall not be counted toward the
number of Demand Registrations), and the Company shall pay all Registration
Expenses in connection therewith. Any Holder requesting inclusion in a Demand
Registration may, at any time prior to the effective date of the Demand
Registration Statement (and for any reason) revoke such request by delivering
written notice to the Company revoking such requested inclusion.
The registration rights granted pursuant to the provisions of this
Section 2.1 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter,
as the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering
within a price range acceptable to the Majority Holders of the Registration
(such writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), and the Request
is not thereafter withdrawn, the Company shall include in such Demand
Registration, to the extent of the number which the Company is so advised may
be included in such offering, the Registrable Securities requested to be
included in the Demand Registration by the Holders allocated pro rata in
proportion to the number of Registrable Securities requested to be included in
such Demand Registration by each of them. In the event the Company shall not,
by virtue of this Section 2.1(b), include in any Demand Registration all of the
Registrable Securities of any Holder requested to be included in such Demand
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Registration, such Holder may, upon written notice to the Company given within
five days of the time such Holder first is notified of such matter, further
reduce the amount of Registrable Securities it desires to have included in such
Demand Registration, whereupon only the Registrable Securities, if any, that it
desires to have included will be so included and the Holders not so reducing
shall be entitled to a corresponding pro rata increase in the amount of
Registrable Securities to be included in such Demand Registration.
(c) Limitations on Registrations. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: (i) in no event shall the
Company be required to effect a Demand Registration until after the Exercise
Date (as defined in the Warrant); and (ii) in no event shall the Company be
required to effect more than one Demand Registration by the Holders, provided,
however, that such number shall be increased to the extent the Company (x) does
not include in what would otherwise be such registration, for which the Company
is required to pay Registration Expenses, the number of Registrable Securities
requested to be registered by the Holders by reason of Section 2.1(b) or (y)
terminates a Shelf Registration pursuant to Section 2.3 prior to the time that
all Registrable Securities covered by such Shelf Registration have been sold.
(d) Underwriting; Selection of Underwriters. Notwithstanding
anything to the contrary contained in Section 2.1(a), if the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of a firm commitment
Underwritten Offering and such Initiating Holders may require that all Persons
(including other Holders) participating in such registration sell their
Registrable Securities to the Underwriters at the same price and on the same
terms of underwriting applicable to the Initiating Holders. If any Demand
Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration shall be selected by the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request, subject to the approval of the Company (such approval
not to be unreasonably withheld).
(e) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it
has been declared effective by the SEC and remains effective in compliance with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any
Registrable Securities pursuant to such Demand Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, or (iii) if, in the case of
an Underwritten Offering, the conditions to closing specified in an
underwriting agreement to which the Company is a party are not satisfied (other
than by the sole reason of any breach or failure by the Holders of Registrable
Securities) and are not otherwise waived.
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(f) Registration of Other Securities. Whenever the Company shall
effect a Demand Registration, no securities other than (i) the Registrable
Securities, and (ii) any securities requested to be registered by any of the
holders of the warrants issued under the Warrant Purchase Agreement, dated as
of the date hereof, among the Company, Fleet National Bank, Comerica Bank,
LaSalle Bank National Association and SunTrust Bank, South Florida, N.A. (the
"Warrant Purchase Agreement") shall be covered by such registration unless the
Majority Holders of the Registration shall have consented in writing to the
inclusion of such other securities; provided, however, that the number of
shares of Registrable Securities to be registered by the Holders shall not be
reduced pursuant to Section 2.1(b) unless all other securities are first
entirely excluded from the underwriting (except for the securities proposed to
be registered by the holders of the warrants issued under the Warrant Purchase
Agreement, which shall have the same priority as the Registrable Securities).
(g) Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate registration form of the SEC (i) as shall be
reasonably selected by the Company, and (ii) which shall be available for the
sale of Registrable Securities in accordance with the intended method or
methods of disposition specified in the requests for registration. With the
approval of the Company (not to be unreasonably withheld), the Company shall
include in any such Registration Statement all information which any selling
Holder, upon advice of counsel, shall reasonably request.
(h) Other Registrations. During the period (i) beginning on the
date of a Request and (ii) ending on the date that is 90 days after the date
that a Demand Registration Statement filed pursuant to such Request has been
declared effective by the SEC or, if the Holders shall withdraw such Request or
such Demand Registration Statement, on the date of such Withdrawn Request or
such Withdrawn Registration Statement, the Company shall not, without the
consent of the Majority Holders of the Registration, file a registration
statement pertaining to any other securities of the Company.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at
any time or from time to time proposes to register any of its securities under
the Securities Act (other than in a registration on Form S-4 or S-8 or any
successor form to such forms and other than pursuant to Section 2.1 or 2.3)
whether or not pursuant to registration rights granted to other holders of its
securities and whether or not for sale for its own account, the Company shall
deliver prompt written notice (which notice shall be given at least 30 days
prior to such proposed registration) to all Holders of Registrable Securities
of its intention to undertake such registration, describing in reasonable
detail the proposed registration and distribution (including the anticipated
range of the proposed offering price, the class and number of securities
proposed to be registered and the distribution arrangements) and of such
Holders' right to participate in such registration under this Section 2.2 as
hereinafter provided. Subject to the other provisions of this paragraph (a) and
Section 2.2(b), upon the written request of any Holder made within 30 days
after the receipt of such written notice (which request shall specify the
amount of Registrable Securities to be registered and the intended method of
disposition thereof), the Company shall effect
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the registration under the Securities Act of all Registrable Securities
requested by Holders to be so registered (an "Incidental Registration"), to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered, by inclusion of such Registrable Securities in the Registration
Statement which covers the securities which the Company proposes to register
and shall cause such Registration Statement to become and remain effective with
respect to such Registrable Securities in accordance with the registration
procedures set forth in Section 4. If an Incidental Registration involves an
Underwritten Offering, immediately upon notification to the Company from the
Underwriter of the price at which such securities are to be sold, the Company
shall so advise each participating Holder. The Holders requesting inclusion in
an Incidental Registration may, at any time prior to the effective date of the
Incidental Registration Statement (and for any reason), revoke such request by
delivering written notice to the Company revoking such requested inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
Holders to cause such registration to be effected as a registration under
Section 2.1 and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay the registration of such Registrable
Securities for the same period as the delay in registering such other
securities; provided, however, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable Securities
in such Incidental Registration, then the Company shall again give all Holders
the opportunity to participate therein and shall follow the notification
procedures set forth in the preceding paragraph. There is no limitation on the
number of such Incidental Registrations pursuant to this Section 2.2 which the
Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.2 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis),
and the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering without
such
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effect, (i) in the case of a registration initiated by the Company, (A) first,
the securities that the Company proposes to register for its own account (but
solely to the extent that the proceeds thereof shall not be used to purchase
shares of common stock of the Company or other securities of the Company), (B)
second, on a pro rata basis, in proportion to the number of securities
requested to be included in such registration by each of the following, (i) the
Registrable Securities requested to be included in such registration by the
Holders and (ii) the securities requested to be included in such registration
by the holders of the warrants granted pursuant to the Warrant Purchase
Agreement, and (C) third, other securities of the Company to be registered on
behalf of any other Person, and (ii) in the case of a registration initiated by
a Person other than the Company, (A) first, the Registrable Securities
requested to be included in such registration by any Persons initiating such
registration requested to be included in such registration by any Persons
initiating such registration, (B) second, the Registrable Securities requested
to be included in such registration by the Holders and any other Persons (not
including Affiliates of the Company), allocated pro rata in proportion to the
number of securities requested to be included in such registration by each of
them, and (C) third, the securities that the Company proposes to register for
the account of it and its Affiliates, provided, however, that in the event the
Company will not, by virtue of this Section 2.2(b), include in any such
registration all of the Registrable Securities of any Holder requested to be
included in such registration, such Holder may, upon written notice to the
Company given within three days of the time such Holder first is notified of
such matter, reduce the amount of Registrable Securities it desires to have
included in such registration, whereupon only the Registrable Securities, if
any, it desires to have included will be so included and the Holders not so
reducing shall be entitled to a corresponding pro rata increase in the amount
of Registrable Securities to be included in such registration.
2.3 Shelf Registration.
(a) Shelf Registration. If a request made pursuant to Section 2.1
is for a Shelf Registration, the Company shall use its best efforts to keep the
Shelf Registration continuously effective through the date on which all of the
Registrable Securities covered by such Shelf Registration may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor provision having
similar effect); provided, however, that prior to the termination of such Shelf
Registration, the Company shall first furnish to each Holder of Registrable
Securities participating in such Shelf Registration (i) an opinion, in form and
substance satisfactory to the Majority Holders of the Registration, of counsel
for the Company satisfactory to the Majority Holders of the Registration
stating that such Registrable Securities are freely saleable pursuant to Rule
144(k) under the Securities Act (or any successor provision having similar
effect) or (ii) a "No-Action Letter" from the staff of the SEC stating that the
SEC would not recommend enforcement action if the Registrable Securities
included in such Shelf Registration were sold in a public sale other than
pursuant to an effective registration statement.
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2.4 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole or
lead managing Underwriter for any Underwritten Offering effected pursuant to a
Demand Registration, the Company shall enter into a customary underwriting
agreement with the Underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Company and each Holder of
Registrable Securities participating in such offering and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 5.
(b) Holders of Registrable Securities to be Parties to
Underwriting Agreement. The Holders of Registrable Securities to be distributed
by Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such Underwriters shall also be made to and
for the benefit of such Holders of Registrable Securities and that any or all
of the conditions precedent to the obligations of such Underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities; provided, however, that the Company shall
not be required to make any representations or warranties with respect to
written information specifically provided by a selling Holder for inclusion in
the Registration Statement. No Holder shall be required to make any
representations or warranties to, or agreements with, the Company or (in the
case of an Incidental Registration) the Underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition.
(c) Participation in Underwritten Registration. Notwithstanding
anything herein to the contrary, no Person may participate in any underwritten
registration hereunder unless such Person (i) agrees to sell its securities on
the same terms and conditions provided in any underwritten arrangements
approved by the Persons entitled hereunder to approve such arrangement and (ii)
accurately completes and executes in a timely manner all questionnaires, powers
of attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
2.5 Expenses. The Company shall pay all Registration Expenses in
connection with any Demand Registration, Incidental Registration or Shelf
Registration whether or not such registration shall become effective and
whether or not all Registrable Securities originally requested to be included
in such registration are withdrawn or otherwise ultimately not included in such
registration, except as otherwise provided with respect to a Withdrawn Request
and a Withdrawn Demand Registration in Section 2.1(a).
2.6 Postponement. The Company shall be entitled to postpone a
Demand Registration and to require the Holders of Registrable Securities to
discontinue the disposition of their securities covered by a Shelf Registration
during any Blackout Period (as defined below) (i)
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if the Board of Directors of the Company determines in good faith that
effecting such a registration or continuing such disposition at such time would
have a material adverse effect upon a proposed sale of all (or substantially
all) of the assets of the Company or a merger, reorganization, recapitalization
or similar current transaction materially affecting the capital structure or
equity ownership of the Company, or (ii) if the Company is in possession of
material information which the Board of Directors of the Company determines in
good faith that it is not in the best interest of the Company to disclose in a
registration statement at such time; provided however, that the Company may
only delay a Demand Registration pursuant to this Section 2.6 by delivery of a
Blackout Notice (as defined below) within 30 days of delivery of the request
for such Registration under Section 2.1 or Section 2.3 as applicable, and may
delay a Demand Registration and require the holders of Registrable Securities
to discontinue the disposition of their securities covered by a Shelf
Registration only for a reasonable period of time not to exceed 90 days (or
such earlier time as such transaction is consummated or no longer proposed or
the material information has been made public) (the "Blackout Period"). All
delays or postponements, taken as a whole, with respect to a Demand
Registrations or Shelf Registrations, may not exceed 90 days in the aggregate.
The Company shall promptly notify the Holders in writing (a "Blackout Notice")
of any decision to postpone a Demand Registration or to discontinue sales of
Registrable Securities covered by a Shelf Registration pursuant to this Section
2.6 and shall include a general statement of the reason for such postponement,
an approximation of the anticipated delay and an undertaking by the Company
promptly to notify the Holders as soon as a Demand Registration may be effected
or sales of Registrable Securities covered by a Shelf Registration may resume.
Each Holder shall treat all notices received from the Company pursuant to this
Section 2.6 in the strictest confidence and shall not disseminate such
information. If the Company shall postpone the filing of a Demand Registration
Statement the Majority Holders of Registrable Securities who were to
participate therein shall have the right to withdraw the request for
registration. Any such withdrawal shall be made by giving written notice to the
Company within 30 days after receipt of the Blackout Notice. Such withdrawn
registration request shall not be treated as a Demand Registration effected
pursuant to Section 2.1 (and shall not be counted towards the number of Demand
Registrations effected), and the Company shall pay all Registration Expenses in
connection therewith.
3. HOLDBACK ARRANGEMENTS
3.1 Restrictions on Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities agrees, by acquisition of such
Registrable Securities, if timely requested in writing by the sole or lead
managing Underwriter, not to make any short sale of, loan, grant any option for
the purchase of or effect any public sale or distribution, including a sale
pursuant to Rule 144 (or any successor provision having similar effect) under
the Securities Act of any Registrable Securities (except as part of such
registration), during the seven days prior to, and during the time period
reasonably requested by the sole or lead managing Underwriter, not to exceed
180 days, beginning on the effective date of the applicable registration
statement, unless the sole or lead Managing Underwriter in such Underwritten
Offering otherwise agrees.
3.2 Restrictions on Sale by the Company and Others. The Company
agrees that if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten
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Offering of any Registrable Securities, not to make any short sale of, loan,
grant any option for the purchase of or effect any public sale or distribution
of any of the Company's equity securities (or any security convertible into or
exchangeable or exercisable for any of the Company's equity securities) during
the seven days prior to, and during the time period reasonably requested by the
sole or lead managing Underwriter not to exceed 180 days, beginning on the
effective date of the applicable registration statement (except as part of such
underwritten registration or pursuant to registrations on Forms S-4 or S-8 or
any successor form to such forms), unless the sole or lead Managing Underwriter
in such Underwritten Offering otherwise Agrees. The Company will use its best
efforts to cause each director or officer of the Company and each holder of 3%
or more of the equity securities (or any security convertible into or
exchangeable or exercisable for any of its equity securities) of the Company
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering or in a public sale) to so agree.
4. REGISTRATION PROCEDURES.
4.1 Obligations of the Company. Whenever the Company is required
to effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, as expeditiously as
possible:
(a) prepare and file with the SEC (promptly, and in any event
within 60 days after receipt of a request to register Registrable Securities)
the requisite Registration Statement to effect such registration, which
Registration Statement shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use its best
efforts to cause such Registration Statement to become effective (promptly, and
in any event within 150 days after receipt of a request to register Registrable
Securities) (provided, that the Company may discontinue any registration of its
securities that are not Registrable Securities, and, under the circumstances
specified in Section 2.2, its securities that are Registrable Securities);
provided, however, that before filing a Registration Statement or Prospectus or
any amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company shall (i) provide
Holders' Counsel and any other Inspector with an adequate and appropriate
opportunity to participate in the preparation of such Registration Statement
and each Prospectus included therein (and each amendment or supplement thereto
or comparable statement) to be filed with the SEC, which documents shall be
subject to the review and comment of Holders' Counsel, and (ii) not file any
such Registration Statement or Prospectus (or amendment or supplement thereto
or comparable statement) with the SEC to which Holder's Counsel, any selling
Holder or any other Inspector shall have reasonably objected on the grounds
that such filing does not comply in all material respects with the requirements
of the Securities Act or of the rules or regulations thereunder;
(b) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the Prospectus used in connection therewith
as may be necessary (i) to keep such Registration Statement effective, and (ii)
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until such time as all of such Registrable Securities
have
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been disposed of in accordance with the intended methods of disposition by the
seller(s) thereof set forth in such Registration Statement.
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement
(including each preliminary Prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such selling Holder and Underwriter
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by such selling Holder (the
Company hereby consenting to the use in accordance with applicable law of each
such Registration Statement (or amendment or post-effective amendment thereto)
and each such Prospectus (or preliminary prospectus or supplement thereto) by
each such selling Holder of Registrable Securities and the Underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities, use
its best efforts to register or qualify all Registrable Securities and other
securities covered by such Registration Statement under such other securities
or blue sky laws of such jurisdictions as any selling Holder of Registrable
Securities covered by such Registration Statement or the sole or lead managing
Underwriter, if any, may reasonably request to enable such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder and to continue such registration or qualification
in effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals),
and do any and all other acts and things which may be necessary or advisable to
enable any such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such selling Holder.
(e) use its best efforts to obtain all other approvals, consents,
exemptions or authorizations from such governmental agencies or authorities as
may be necessary to enable the selling Holders of such Registrable Securities
to consummate the disposition of such Registrable Securities;
(f) notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or
post-effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
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existence of any fact of which the Company becomes aware or the happening of
any event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to
be stated therein or necessary to make any statements therein not misleading,
or (B) the Prospectus included in such Registration Statement containing an
untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statements therein, in
the light of the circumstances under which they were made, not misleading, (vi)
if at any time the representations and warranties contained in any underwriting
agreement in respect of such offering cease to be true and correct in all
material respects, and (vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate or
that there exists circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment; and, if the notification relates to an
event described in any of the clauses (ii) through (vii) of this Section
4.1(f), the Company shall promptly prepare a supplement or post-effective
amendment to such Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that
(1) such Registration Statement shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (2) as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading (and shall furnish to each such
Holder and each Underwriter, if any, a reasonable number of copies of such
Prospectus so supplemented or amended); and if the notification relates to an
event described in clause (iii) of this Section 4.1(f), the Company shall take
all reasonable action required to prevent the entry of such stop order or to
remove it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective date
of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in
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customary form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably satisfactory to
the sole or lead managing Underwriter, if any, and to the Majority Holders of
the Registration, and furnish to each Holder participating in the offering and
to each Underwriter, if any, a copy of such opinion and letter addressed to
such Holder (in the case of the opinion) and Underwriter (in the case of the
opinion and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than
the effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and any other governmental agency or authority
having jurisdiction over the offering, and make available to its security
holders, as soon as reasonably practicable but no later than 90 days after the
end of any 12-month period, an earnings statement (i) commencing at the end of
any month in which Registrable Securities are sold to Underwriters in an
Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such
12-month periods, in a manner which satisfies the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the Registration,
use its best efforts to cause all such Registrable Securities to be duly
included for quotation on the Nasdaq Stock Market's National Market (the
"Nasdaq National Market"), the Nasdaq Stock Market's SmallCap Market (the
"Nasdaq SmallCap Market") or listed on the principal national securities
exchange on which the Company's similar securities are then listed, if
applicable;
(l) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(m) cooperate with each selling Holder of Registrable Securities
and each Underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD and make reasonably available its employees and
personnel and otherwise provide reasonable assistance to the Underwriters
(taking into account the needs of the Company's businesses and the requirements
of the marketing process) in the marketing of Registrable Securities in any
Underwritten Offering;
(n) cooperate with the selling Holders of Registrable Securities
and the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the Underwriters or, if not an Underwritten Offering, in
accordance with the instructions of the
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selling Holders of Registrable Securities at least three business days prior to
any sale of Registrable Securities;
(o) keep each selling Holder of Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 2
hereunder;
(p) furnish to each Holder participating in the offering and the
sole or lead managing Underwriter, if any, without charge, at least one copy of
the Registration Statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those deemed to be incorporated by
reference); and
(q) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information concerning such Holder
of Registrable Securities, the Underwriters or the intended method of
distribution as the sole or lead managing Underwriter or the selling Holder of
Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such
offering; make all required filings of such Prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment; and supplement or
make amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities.
4.2 Seller Information. The Company may require each selling
Holder of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding such seller and the
disposition of such securities as the Company may from time to time reasonably
request in writing; provided, however, that such information shall be used only
in connection with such Registration. If any Registration Statement or
comparable statement under "blue sky" laws refers to any Holder by name or
otherwise as the Holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in form
and substance satisfactory to such Holder and the Company, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Holder will assist in meeting any future financial requirements of the Company,
and (ii) in the event that such reference to such Holder by name or otherwise
is not in the judgment of the Company, as advised by counsel, required by the
Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Holder.
4.3 Notice to Discontinue. Each Holder of Registrable Securities
agrees by acquisition of such Registrable Securities that, (i) upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 4.1(f)(ii) through 4.1(f)(v), such
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Holder shall forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4.1(f) and, if so directed by the Company,
such Holder shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Holder's possession of the
Prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 4.1(b)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 4.1(f) to and including the date when the Holder shall have received
the copies of the supplemented or amended prospectus contemplated by and
meeting the requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
5.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each
Holder of Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates, advisers, attorneys and agents
(collectively, "Agents") and each Person who controls such Holder (within the
meaning of the Securities Act) and its Agents with respect to each registration
which has been effected pursuant to this Agreement, against any and all losses,
claims, damages or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof, and expenses (as incurred
or suffered and including, but not limited to, any and all expenses incurred in
investigating, preparing or defending any litigation or proceeding, whether
commenced or threatened, and the reasonable fees, disbursements and other
charges of legal counsel) in respect thereof (collectively, "Claims"), insofar
as such Claims arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (including any preliminary, final or summary prospectus and any
amendment or supplement thereto) related to any such registration or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, or any
qualification or compliance incident thereto; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made
in reliance upon and in conformity with written information furnished to the
Company by a Holder, Underwriter or other indemnified person hereunder
expressly for use therein. The Company shall also indemnify any Underwriters of
the Registrable Securities, their Agents and each Person who controls any such
Underwriter (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders of
Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Person who may be
entitled to indemnification pursuant to this Section 5 and shall survive the
transfer of securities by such Holder or Underwriter.
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5.2 Indemnification by Holders. Each Holder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors
and officers, each other Person who participates as an Underwriter in the
offering or sale of such securities and its Agents and each Person who controls
the Company against any and all Claims, insofar as such Claims arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (including any
preliminary, final or summary prospectus and any amendment or supplement
thereto) related to such registration, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by a Holder, Underwriter or other
indemnified person hereunder expressly for use therein; provided, however, that
the aggregate amount which any such Holder shall be required to pay pursuant to
this Section 5.2 shall in no event be greater than the amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such Claims less all
amounts previously paid by such Holder with respect to any such Claims.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party of notice of any Claim or the commencement of any
action or proceeding involving a Claim under this Section 5, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 5, (i) notify the indemnifying party in
writing of the Claim or the commencement of such action or proceeding;
provided, that the failure of any indemnified party to provide such notice
shall not relieve the indemnifying party of its obligations under this Section
5, except to the extent the indemnifying party is materially and actually
prejudiced thereby and shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under this
Section 5, and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any indemnified party shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (A) the indemnifying party has agreed in writing to pay such fees and
expenses, (B) the indemnifying party shall have failed to assume the defense of
such claim and employ counsel reasonably satisfactory to such indemnified party
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so, or (C) in the reasonable
judgment of any such indemnified party, based upon advice of counsel, a
conflict of interest shall exist between such indemnified party and the
indemnifying party with respect to such claims; it being understood, however,
that the indemnifying party shall not, in connection with any one such action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to no more than one firm of local counsel) at any time
for all such indemnified parties. No indemnifying party shall be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. No indemnifying party shall,
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without the consent of the indemnified party, which consent shall not be
unreasonable withheld, consent to entry of any judgment or enter into any
settlement of any claim or action in respect of which indemnification or
contribution may be sought hereunder, unless such settlement, (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim, (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party, and (3) does not provide for any action on the part of any
party other than the payment of money damages which is to be paid in full by
the indemnifying party.
5.4 Contribution. If the indemnification provided for in Section
5.1 or 5.2 from the indemnifying party for any reason is unavailable to (other
than by reason of exceptions provided therein), or is insufficient to hold
harmless an indemnified party hereunder in respect of any Claim, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claim in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other hand, in connection with the actions which resulted in such Claim, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations.
5.5 Indemnification Payments. The indemnification and contribution
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills
are received or any expense, loss, damage or liability is incurred.
6. General.
6.1 Adjustments Affecting Registrable Securities. The Company
agrees that it shall not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the Holder of
any Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
6.2 Registration Rights to Others. Other than (i) as set forth on
Schedule A attached hereto and (ii) registration rights granted to present and
former directors and officers that are not in conflict with the provisions
hereof, the Company represents and warrants that it is not currently a party to
any agreement with respect to its securities granting registration rights to
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Persons. If the Company shall at any time hereafter provide to any holder of
any securities of the Company rights with respect to the registration of such
securities under the Securities Act (not including any such rights which have
been previously granted), such rights shall not be in conflict with or
adversely affect any of the rights provided in this Agreement to the Holders.
6.3 Availability of Information; Rule 144; Other Exemptions. At
any time during which the Company is not subject to the reporting requirements
of the Exchange Act, the Company shall, at any time and from time to time, upon
the request of any Holder of Registrable Securities or upon the request of any
Person designated by such Holder as a prospective purchaser of any Registrable
Securities, furnish in writing to such Holder or such prospective purchaser, as
the case may be, a statement as of a date not earlier than 12 months prior to
the date of such request of the nature of the business of the Company and the
products and services it offers and copies of the Company's most recent balance
sheet and profit and loss and retained earnings statements, together with
similar financial statements for such part of the two preceding fiscal years as
the Company shall have been in operation, all such financial statements to be
audited to the extent audited statements are reasonable available, provided
that, in any event the most recent financial statements so furnished shall
include a balance sheet as of a date less than 16 months prior to the date of
such request, statements of profit and loss and retained earnings for the 12
months preceding the date of such balance sheet, and, if such balance sheet is
not as of a date less than 6 months prior to the date of such request,
additional statements of profit and loss and retained earnings for the period
from the date of such balance sheet to a date less than 6 months prior to the
date of such request. During any time during which the Company is not subject
to the reporting requirements of the Exchange Act and as long as any
Registrable Securities are outstanding or the Warrants have not yet expired,
the Company shall deliver to the Holders all reports, financial statements and
other documents required to be provided under subsections (i), (ii) and (iii)
of Section 7.01(a) of the Financing Agreement, without regard to (A) whether,
at any time, such reporting requirements are required pursuant to Section 7.01
of the Financing Agreement and (B) whether all Liens, Reimbursement
Obligations, Letter of Credit Obligations and all other Obligations under the
Financing Agreement have been paid or whether any Lender shall have any
commitment thereunder. The Company will use its best efforts to take such steps
as are necessary to allow the Company to become, and remain, eligible to
register securities on Form S-3 (of any comparable form adopted by the SEC) for
resale purposes, and to make publicly available and available to the Holder of
Registrable Securities to make sales of Registrable Securities pursuant to such
rules.
The Company covenants that it shall timely file any reports required
to be filed by it under the Securities Act or the Exchange Act (including, but
not limited to, the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c) of Rule 144 under the Securities Act), and that
it shall take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or (ii) any
other rule or regulation now existing or hereafter adopted by the SEC. The
Company will furnish to any Holder of Registrable Securities, upon request made
by such Holder at any time, a written statement signed by the Company,
addressed to such Holder,
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as to whether the Company has complied with the current public information
requirements of Rule 144 or Rule 144A. The Company will, at the request of any
Holder of Registrable Securities (upon receipt from such Holder of a
certificate certifying (i) that such Holder has held such Registrable
Securities for a period of not less than one (1) year, and (ii) that such
Holder has not been an affiliate (as defined in Rule 144) of the Company for
more than the ninety (90) preceding days), remove from the stock certificates
representing such Registrable Securities that portion of any restrictive legend
which relates to the registration provisions of the Securities Act.
6.4 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified,
supplemented or terminated, and waivers or consents to departures from the
provisions hereof may not be given, without the written consent of the Company
and the Majority Holders; provided, however, that no such amendment,
modification, supplement, waiver or consent to departure shall reduce the
aforesaid percentage of Registrable Securities without the written consent of
all of the Holders of Registrable Securities; and provided further, that
nothing herein shall prohibit any amendment, modification, supplement,
termination, waiver or consent to departure the effect of which is limited only
to those Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.5 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
If to the Company: Outsource International, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx
Fax No. (000) 000-0000
with copies to: Akermann Senterfitt
Las Olas Centre II
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Fax No. 000-000-0000
If to the Initial Holders: Ableco Finance LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx
Fax No. 000-000-0000
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with copies to: Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
Fax No. 000-000-0000
If to any subsequent
Holder, to the address of
such Person set forth in
the records of the
Company.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
6.6 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors and permitted assigns (including any permitted transferee of the
Warrant or Registrable Securities). Any Holder may assign to any permitted (as
determined under the Warrant) transferee of its Warrant or Registrable
Securities (other than a transferee that acquires such Registrable Securities
in a registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any permitted transferee shall take and hold
the Warrant or Registrable Securities, such transferee shall promptly notify
the Company and by taking and holding such Registrable Securities such
permitted transferee shall automatically be entitled to receive the benefits of
and be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement as if it were a party hereto (and
shall, for all purposes, be deemed a Holder under this Agreement). If the
Company shall so request any heir, successor or permitted assign (including any
permitted transferee) wishing to avail itself of the benefits of this Agreement
shall agree in writing to acquire and hold the Registrable Securities subject
to all of the terms hereof. For purposes of this Agreement, "successor" for any
entity other than a natural person shall mean a successor to such entity as a
result of such entity's merger, consolidation, sale of substantially all of its
assets, or similar transaction. Except as provided above or otherwise permitted
by this Agreement, neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any
Holder or by the Company without the consent of the other parties hereto.
6.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.8 Descriptive Headings, Etc. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any
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gender shall be deemed to include each other gender; (2) words using the
singular or plural number shall also include the plural or singular number,
respectively; (3) the words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section and
paragraph references are to the Sections and paragraphs of this Agreement
unless otherwise specified; (4) the word "including" and words of similar
import when used in this Agreement shall mean "including, without limitation,"
unless otherwise specified; (5) "or" is not exclusive; and (6) provisions apply
to successive events and transactions.
6.9 Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.10 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.. THE VALIDITY OF
THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND
THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. THE
COMPANY AND THE INITIAL HOLDERS WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 6.10.
THE COMPANY AND THE INITIAL HOLDERS HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
OR STATUTORY CLAIMS. THE COMPANY AND THE INITIAL HOLDERS REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
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6.11 Remedies; Specific Performance. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this
Agreement, without the posting of any bond, in accordance with the terms and
conditions of this Agreement in any court specified in Section 6.10 hereof, and
if any action should be brought in equity to enforce any of the provisions of
this Agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law. Except as otherwise provided by law, a delay or
omission by a party hereto in exercising any right or remedy accruing upon any
such breach shall not impair the right or remedy or constitute a waiver of or
acquiescence in any such breach. No remedy shall be exclusive of any other
remedy. All available remedies shall be cumulative.
6.12 Entire Agreement. This Agreement, the Financing Agreement, the
Warrant and the other transaction documents (collectively, (the "Other
Agreements")) are intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to such subject matter, other
than those set forth or referred to herein or in the Other Agreements. This
Agreement and the Other Agreements supersede all prior agreements and
understandings between the Company and the other parties to this Agreement with
respect to such subject matter.
6.13 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
6.14 Construction. The Company and the Initial Holders acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement with its legal
counsel and that this Agreement shall be construed as if jointly drafted by the
Company and the Holders.
6.15 No Inconsistent Agreement. The Company will not hereafter
enter into any agreement which is inconsistent with the rights granted to the
Holders in this Agreement.
6.16 Costs and Attorneys' Fees. In the event that any action, suit
or other proceeding is instituted concerning or arising out of this Agreement,
the Company and the Initial Holders agree that the prevailing party shall
recover from the non-prevailing party all of such prevailing party's costs and
reasonable attorneys' fees incurred in each and every such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
INITIAL HOLDER:
OUTSOURCE INTERNATIONAL, INC. ABLECO HOLDING LLC
By: /s/ Xxx X. Xxxxxxxx By: /s/ Xxxxx X. Genda
-------------------------- -----------------------------
Name: Xxx X. Xxxxxxxx Name: Xxxxx X. Genda
Title: Vice President Title: Senior Vice President
29
SCHEDULE A
Outstanding Registration Rights
Pursuant to the Warrant Purchase Agreement, dated as of the date
hereof, among the Company, Fleet National Bank, Comerica Bank, LaSalle Bank
National Association and SunTrust Bank, South Florida, N.A.
Pursuant to the Registration Rights Agreement, dated as of February
21, 1997 among the Company Triumph-Connecticut Limited Partnership and Bachow
Investment Partners III, L.P., and the other investors party thereto.
Pursuant to a Separation Agreement and Release, dated as of April 6,
2000, Xxxxxx X. Xxxxxxx, a former officer and director of the Company, was
granted registration rights as follows: the Company agreed to update and amend
a previously filed Form S-3 Registration Statement filed on Xx. Xxxxxxx'x
behalf on December 17, 1998 (#333-69125) as soon as practicable following the
filing of the Company's Form 10-K for the fiscal year 1999, and the Company
agreed to keep such Registration Statement current and effective for a period
of sixty-six months from the date of the Separation Agreement and Release, or
until such time as the common shares subject to such Registration Statement are
eligible for sale pursuant to the provisions of Rule 144(k), whichever occurs
first.
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